diff --git a/src/ocaml/typing/typedecl.ml b/src/ocaml/typing/typedecl.ml
index 50594434f..ebbac722b 100644
--- a/src/ocaml/typing/typedecl.ml
+++ b/src/ocaml/typing/typedecl.ml
@@ -1955,7 +1955,9 @@ let transl_type_decl env rec_flag sdecl_list =
     (fun sdecl tdecl ->
       let decl = tdecl.typ_type in
        match Ctype.closed_type_decl decl with
-         Some ty -> raise(Error(sdecl.ptype_loc, Unbound_type_var(ty,decl)))
+         Some ty ->
+          if not (Msupport.erroneous_type_check ty) then
+            raise(Error(sdecl.ptype_loc, Unbound_type_var(ty,decl)))
        | None   -> ())
     sdecl_list tdecls;
   (* Check that constraints are enforced *)
diff --git a/src/ocaml/typing/typetexp.ml b/src/ocaml/typing/typetexp.ml
index 132f60f05..3bf96633b 100644
--- a/src/ocaml/typing/typetexp.ml
+++ b/src/ocaml/typing/typetexp.ml
@@ -644,9 +644,11 @@ let rec transl_type env ~policy ?(aliased=false) ~row_context mode styp =
        try
          transl_type_aux env ~policy ~aliased ~row_context mode styp
        with exn ->
+         let ty = new_global_var (Jkind.value ~why:(Unknown "merlin")) in
+         Msupport.erroneous_type_register ty;
          Msupport.raise_error exn;
            { ctyp_desc = Ttyp_var (None, None);
-             ctyp_type = new_global_var (Jkind.value ~why:(Unknown "merlin"));
+             ctyp_type = ty;
              ctyp_env = env;
              ctyp_loc = styp.ptyp_loc;
              ctyp_attributes = [];
diff --git a/tests/test-dirs/errors/issue1704-wrong-message.t b/tests/test-dirs/errors/issue1704-wrong-message.t
new file mode 100644
index 000000000..b6e7faa11
--- /dev/null
+++ b/tests/test-dirs/errors/issue1704-wrong-message.t
@@ -0,0 +1,59 @@
+  $ cat >test.ml <<'EOF'
+  > type foo = {
+  >   bar: X.t;
+  > }
+  > type foo2 = X.t
+  > type foo3 = bar
+  > EOF
+
+Merlin should not report unbound variable errors in that case since it is
+due to it's own type recovery.
+  $ $MERLIN single errors -filename test.ml <test.ml 
+  {
+    "class": "return",
+    "value": [
+      {
+        "start": {
+          "line": 2,
+          "col": 7
+        },
+        "end": {
+          "line": 2,
+          "col": 10
+        },
+        "type": "typer",
+        "sub": [],
+        "valid": true,
+        "message": "Unbound module X"
+      },
+      {
+        "start": {
+          "line": 4,
+          "col": 12
+        },
+        "end": {
+          "line": 4,
+          "col": 15
+        },
+        "type": "typer",
+        "sub": [],
+        "valid": true,
+        "message": "Unbound module X"
+      },
+      {
+        "start": {
+          "line": 5,
+          "col": 12
+        },
+        "end": {
+          "line": 5,
+          "col": 15
+        },
+        "type": "typer",
+        "sub": [],
+        "valid": true,
+        "message": "Unbound type constructor bar"
+      }
+    ],
+    "notifications": []
+  }